Service provisioning models and analysis

As companies analyse their current methods for providing services there are some basic alternatives to be considered that assist in framing the discussion and the analysis. There are distinct advantages to the various provisioning service model s available, and while there are non-financial aspects to consider, such as service quality and transition readiness, this section will only address the financial analysis of the presented models.

The Managed Services provisioning model is the more traditional variant commonly known in the industry. In its simplest form, it is where a business unit requiring a service funds the provision of that service for itself. The service provider attempts to calculate the cost of the service in terms of development, infrastructure, manpower etc. so that the business and the service provider can plan for funding accordingly. In this simple example, the service is managed through the customer -specific application of service-related hardware, software and manpower, and the business unit pays for the entire service.

This is typically the most expensive service provisioning model because the resource s used to provide the service are completely dedicated to the service of a single entity. If the consumer does not utilize the service and related resources to the fullest extent technically possible, then unused capacity and the opportunity to provide additional services using the same capacity and resources is lost.

The model for Shared Services targets the provisioning of multiple services to one or more business units through use of shared infrastructure and resources (Figure 5.4). This concept is also widely applied throughout industry and represents significant cost savings to practitioners over the managed services model through the increased utilization of existing resources.

Figure 5.4 Shared services

Utility-based Provisioning maximizes the combination of services being provisioned over the same infrastructure so that even more services are provisioned utilizing the same resources found in the Shared Services model. This is accomplished by providing services on a utility basis, dependent on how much, how often, and at what times the customer needs them. (N.B. The term ‘utility’ is used here with a very specific meaning, different from the meaning used in the rest of the publication.) Examples of such services would include an accounting application with primary usage at the end of each month, a reporting service that receives heavy usage only around the 1st and 15th of each month, or a production-related service used only in every other production cycle as production line outputs are changed.

This service provisioning model is the most cost-effective and the most elusive in that it requires a level of knowledge and capability missing from many IT organizations today. These cost savings are achieved primarily through leveraging a deeper understanding of technology architecture s and customer needs in order to compile a service combination and architecture that enables maximum utilization of existing resources.

On-shore, Off-shore or Near-shore? The advent of off-shore service provisioning and its related success is not new. However, companies are still finding that what represents an off-shore opportunity for one firm may not necessarily be an opportunity for another. Many service elements discussed in this publication (and others discussed in the Service design, Service Transition and Service Operation s publications) are combined in an analysis of what mix of on-shore, near-shore and off-shore service provisioning is right for a specific company at a specific time.

The Financial Management impact on this decision cannot be underestimated. If a company does not understand its core service cost components and variable cost dynamics, it will typically have a difficult time making logical and fact-based decisions regarding outsourcing models, and an equally difficult time asking the right questions of providers.

Service provisioning cost analysis is the activity of statistically ranking the various forms of provisioning (and often providers) to determine the most beneficial model. A simplified example of a comparative service provisioning cost analysis that accounts for the way provisioning models could impact the cost of a service is provided. Table 5.1 is a simplified example of service cost component s for the Service Desk function and how they come into play within the analysis of various provisioning models.

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In this example, the scoring mechanism is normalized to a five-point scale where the lowest score is preferred. Notice that the company has ranked itself lower in some service components relative to the service quality and cost it has determined to be available in the market from alternative providers. If only the simplified overall scores for each provider are assessed, the off-shore shared services provider appears to offer the lowest cost and highest quality for the entire portfolio of services. On closer inspection, however, the same provider offers the same tiered support service quality as the company’s existing Type I provider in all areas except Tier 3 support, estimated to be inferior to the provider.

Given that existing internal Tier 1 support has been ranked among the bottom of all alternatives, and existing Tier 3 internal support is actually superior, this provider may not offer the correct combination of cost and quality. Similar deficiencies and strengths are evident throughout the provisioning scoring example above. What conclusions can you draw from the scoring? What are some possible causes for the scoring in the presented sections? What optimize d provisioning model would you conclude to be the most applicable for this company to adopt, given its current strengths and weaknesses?

Дата добавления: 2015-11-14